SB 579 Clears the California Senate Business Committee

SB 579 Clears the California Senate Business, Professions and Economic Development Committee; a measure correcting the problems created by the provisions in AB 1570 (Chang) Signed Memorabilia [Ch. 258, Stat. 2016], while preserving consumer protections.

Sacramento, California – April 19, 2017 – The Senate Business, Professions and Economic Development Committee yesterday approved SB 579 a measure that corrects the problems created by the provisions in AB 1570 (Chang) [Ch. 258, Stat. 2016], Signed Memorabilia, while preserving consumer protection, on a unanimous vote of 9 Aye, 0 No. SB 579 is authored by Senator Galgiani and co-authored by a bi-partisan group of five Members of the California State Senate.

Last year, the California State Legislature approved and the governor signed into law AB 1570 (Chang) enacting new provisions in Section 1739.7 of the California Civil Code, effective January 1, 2017. The amendments were intended to rigorously govern the sale of “autographed” sports and entertainment memorabilia, by requiring dealers who advertise and sell any item bearing a signature to provide a certificate of authenticity to the purchaser. The new regulation also requires various onerous practices and procedures relating to record maintenance and disclosures of the identity of consignors of such “autographed” items, the latter of which raises privacy and confidentiality concerns. Violation of the statute includes severe civil penalties (up to 10 times actual damages, or more, plus legal fees and costs to a successful claimant).

The language of the new law severely impacts entities that are not, or are only minimally, engaged in the sale of sports and entertainment memorabilia and that were and are not the intended focus of the statute, thereby unintentionally hindering commercial activity in the state of California.

SB 579 corrects this recently-enacted statute by:

• Revising the definitions of “Collectibles” so as to more clearly target “Sports and Entertainment” Memorabilia;

• Revising the definition of “Dealer” to exclude an auction company or auctioneer already governed by existing law, the Auctioneer and Auction Companies Act;

• Striking the requirement that dealers of autographed memorabilia disclose consignors’ identity, in favor of a requirement that dealers maintain records of such data for 7 years and make such a disclosure if mandated by subpoena or court order.

SB 579 preserves provisions in existing law, including the protections afforded consumers in the penal, commercial and civil codes. This bill would declare that it is to take effect immediately as an urgency statute.